A foreign investor’s legal team cited Law No. 11 of 2020 in one due diligence memo, Government Regulation in Lieu of Law No. 2 of 2022 in a second, and Law No. 6 of 2023 in a third, all describing the same thing, Indonesia’s Omnibus Law on Job Creation. The investor asked a reasonable question nobody on the team could answer cleanly: which one is actually the law right now. The honest answer required walking through one of the more contested legislative journeys in recent Indonesian legal history, a law that was passed, formally struck down, resurrected through an emergency mechanism, and only became settled after a second round of constitutional challenges concluded.
That journey is worth understanding, not as legal trivia, but because it determines which citation is actually correct when a document, a regulation, or a piece of commentary references this law today.
Passed, Then Struck Down, Then Resurrected: The Law’s Own Turbulent Path
2020: Passed as Law No. 11 of 2020
Indonesia’s House of Representatives passed the original Omnibus Law on Job Creation, Undang-Undang Cipta Kerja, on 5 October 2020, amending provisions across dozens of existing laws in a single sweeping piece of legislation covering investment, labor, licensing, and environmental regulation. The scale of the law, running well over a thousand pages in its draft form, drew immediate legal challenges over how it had actually been drafted.
2021: The Constitutional Court’s Conditional Unconstitutionality Ruling
In Constitutional Court Decision No. 91/PUU-XVIII/2020, the Court did not strike down the law’s substance. It found the law conditionally unconstitutional on formal grounds, ruling that its drafting process had failed to provide meaningful public participation and had relied on an omnibus legislative method not yet formally recognized under Indonesia’s own law making procedures at the time. The Court gave lawmakers a maximum of two years from the ruling to correct the defect through genuine public participation, warning that failure to do so within that window would render the law permanently unconstitutional. In the meantime, the government was barred from issuing new strategic policy actions or implementing regulations tied to the law.
2022: The Perppu Route, and Why It Was Controversial
Rather than restarting the full legislative process with the participatory consultation the Court had specifically ordered, the government issued Government Regulation in Lieu of Law No. 2 of 2022, a Perppu, an emergency instrument the President can issue under compelling urgency that carries the same legal force as a law without going through the ordinary parliamentary process. Civil society legal groups argued this route sidestepped the Constitutional Court’s actual mandate, since a Perppu’s formation does not require the same public participation mechanism ordinary legislation does. The government’s position was that the Perppu satisfied the urgency requirement given the economic stakes involved and did not itself violate the 2020 ruling.
2023: Ratified as Law No. 6 of 2023, Then Challenged Again and Upheld
The House of Representatives formally ratified the Perppu into permanent law on 21 March 2023, commencing 31 March 2023 as Law No. 6 of 2023. This is the version currently in force. It faced its own wave of formal legal challenges, five separate cases registered before the Constitutional Court, and in each one the Court rejected the petitions, upholding Law No. 6 of 2023 as constitutionally valid. Critics noted the apparent inconsistency between this outcome and the Court’s own 2020 reasoning, but the practical legal reality is straightforward. Law No. 6 of 2023 stands as valid, current law, and the challenges against it have been exhausted.
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What This Means for Legal Certainty Today
For a foreign investor or a company reviewing older documentation, the practical takeaway is that Law No. 6 of 2023 is the citation that reflects current law, not Law No. 11 of 2020 and not the Perppu itself, both of which are now historical steps in the same law’s development rather than independently operative today. Older commentary, contracts, or internal memos still citing the 2020 version are not necessarily wrong about the underlying substance, since most of the reform content carried through largely intact, but they are citing a legal instrument that has since been superseded in form.
The Cross-Cutting Reforms That Actually Touch a PT PMA
The Omnibus Law’s reach extends across nearly every area a foreign investor interacts with, and XPND has covered each of these areas in dedicated depth rather than as a single combined overview.
- Investment liberalization, replacing the old Negative Investment List with the current Positive Investment List framework, covered in XPND’s breakdown of what replaced Indonesia’s Negative Investment List.
- Labor and employment reform, restructuring severance calculations, fixed term contract rules, and outsourcing arrangements, covered in XPND’s Indonesia labor law guide and the site’s dedicated severance pay calculation guide.
- Risk based business licensing, establishing the OSS RBA system that replaced the older permit based model, covered in XPND’s OSS RBA system guide.
- Corporate structuring flexibility, including simplified pathways for mergers, spin offs, and share transfers, covered in XPND’s company restructuring guide.
- Outsourcing and staffing arrangements, where the Manpower Law as amended by the Job Creation Law sets the baseline framework, covered in XPND’s Employer of Record Indonesia guide.
A Practical Sequence for Working With Omnibus Law References
Bringing the legislative history and the current legal status together, a grounded approach for a foreign investor looks like this.
- Treat Law No. 6 of 2023 as the current, citable version of the Omnibus Law, not Law No. 11 of 2020 or the 2022 Perppu, both now superseded in form
- Do not assume a document or contract referencing the older citations is substantively wrong, since most reform content carried through, but flag it for updating to the current reference
- Remember that most of the Omnibus Law’s practical effect actually lives in its implementing regulations, government regulations and ministerial regulations issued under its authority, which continue to be revised independently of the law’s own citation
- When reviewing older due diligence materials or contracts, confirm which specific implementing regulation governs a given obligation today, since those change more frequently than the parent law itself
None of these steps are unusual individually. What causes genuine confusion is treating three different legal citations as interchangeable synonyms, when only one of them reflects the law actually in force today.
XPND’s regulatory advisory team tracks exactly this kind of legislative history for foreign investors, confirming which citation and which implementing regulation actually governs a specific question rather than relying on whichever version of the Omnibus Law a given document happened to reference. A law’s name staying the same across a legislative journey this contested does not mean its legal identity did, and knowing which version is currently speaking is the first thing worth getting right.
